Solar PV and Feed in Tariffs. The Wibbly Wobbly future

I had solar panels fitted this year and it didn’t cost me anything. I “rented my roof” to British Gas, they’ve been very good tenants, no noise or unsightly stains. They paid for the installation and they get the feed in tariff. I get the electricity.

So far the panels have produced 1,420 kWh, which, to put it in simple terms, works out to be £298.20p off my electricity bill, so I’m not complaining.

Of course, under current feed in tariff rates, British Gas will have made £596.40 out of that electricity, sort of.

What is a feed in tariff?

It’s the amount of money you get if you buy solar panels yourself and sell the resulting electricity to the National Grid. It’s a scheme we imported from Germany , it was designed to encourage people to make the investment. It worked in Germany, they now have half the entire planets stock of solar panels installed and are generating 20% of their total power needs from renewable sources. That amounts to billions of Euro’s saved and many billions more in the future.

At present the average cost of one kWh of electricity in the UK, peak time, is around 20p. The feed in tariff paid you around 42p per kWh, so you could theoretically pay off the cost of the solar panels in a few years, and then eventually earn money from them.

What this also meant, which the critics obviously had a field day with, is that everyone has to pay a little more for their electricity. The tweets I’ve received by the ill informed and opinionated are along the lines of ‘are you happy getting poor people to pay for your solar panels you middle class shit.’

Of course it’s utter nonsense, poor people are paying much more to subsidize the nuclear power industry, advocates will tell you this is not the case but who pays to decommission these massive industrial installations. We do and it costs many billions. Who pays to store the terrifying legacy of the last 60 years of nuclear power and military related nuclear waste, stored in tanks at Sellafield, we do. Who will pay for the very long-term storage of hundreds of thousands of tons of highly toxic nuclear waste that needs protecting for generations? We do.

There is a clear and measurable connection between the nuclear power industry and the military, many people hotly deny this, but if there isn’t one, why are we in the least concerned about Iran having nuclear power? They just want harmless electricity generators, there’s no connection, I’m being a silly billy.

So, it’s a complicated and very costly business.

In the olden days, working out market prices, income and expenditure was really simple. Fred made pies, sold them to Pete. Fred made 10 pies and charged a penny for each, Pete gave him 10 pennies, Pete had the pies, Fred had the pennies.

Anyone can understand that.

Now, British Gas, who sell me electricity, pay for solar panels and have them installed on my roof, I get the electricity the panels produce but they get the feed in tariff, except they sell me electricity anyway, but now I’m buying less from them because of the solar panels they gave me.

Overall, British Gas’ dependence on burning fossil fuels to produce electricity is reduced, of course my solar panels save a couple of lumps of coal a day. However, if, say 7 million houses in the UK had the same set up, the total saving would be massive.

The investment would be massive too, but our dependence on burning stuff to make electricity would reduce. Over the long term (what a silly notion to think of things in the long term, very old school) we would save money. Solar panels operate without maintenance for over 20 years and they don’t need fuel.

The recent increased costs of electricity has nothing to do with renewables, we are coming to the end of a long period of cheap, abundant energy. It’s no longer possible to import trillions of barrels of oil, quadrillions of cubic meters of natural gas and shiploads of coal for diddly squit.

Only two things are certain, the cost of installing and running renewable electricity sources is going to get cheaper, everything else is going to get more expensive.

So the recent cuts in the feed in tariff are without doubt going to kick the solar panel industry directly in the happy sacks. If you are thinking of paying for solar panels and you are looking at the issue from a purely financial perspective, forget it. Sure, your annual electricity bill will drop by around £600, you’ll be a microscopic helper in reducing our manic fossil burning but that’s about it.

I never wanted the feed in tariff. If I could have afforded to buy the panels this year I would have, feed in tariff or no. If all goes well, I will be installing a lot more panels next year, paying for them myself. I won’t try and get a feed in tariff because I think they work and they make a difference. If all goes even better next year I want to fit a domestic hydrogen fuel cell system that effectively stores the unused electricity from my panels for later use. I’m too old to ever ‘recover that investment’ and I don’t give a flying fart. I have spent so much me on my house, cars, even computers in the last 30 years than I’d ever thought possible or sensible. I’m never going to ‘get that back.’

But to buy something that generates electricity because it’s a bit sunny is incredible, even today, 1st November 2011, my panels have pumped out 4.31 kWh and it’s only midday. That’s only 80p, but it’s more electricity than the computer I’m writing this on is using. This blog post is therefore carbon neutral.